OEM: supply chain in emerging markets

The issue

In order to reduce costs, a global automotive company was seeking ways to shift segments of its supply chain to emerging markets. The client knew, however, that by their very nature, these markets are difficult to navigate. The client approached several consulting organizations including PricewaterhouseCoopers for support in introducing them to trustworthy and reliable suppliers in China and other emerging markets. After a protracted proposal process PwC was selected.

Our approach

PwC is uniquely capable of identifying and cultivating competitive suppliers in emerging markets. Our organisation has over 20,000 staff located in emerging markets including 6,000 in China alone. So after learning what elements of our client’s supply chain it wanted to shift overseas, we were able to mobilise rapidly, identify proven suppliers, and achieve significant cost savings for our client well ahead of expectations.

The outcome

In our work pairing companies with suppliers in emerging market, clients have not only been pleased with the cost savings resulting from these efforts, but also with the quality of suppliers to whom they have been introduced. While this project is ongoing, a conservative estimate indicates that a $2B/year component family willing to move 40% of their annual spend into emerging markets can realize $160M/year in cost savings.